Stock trading in red: Applied Materials, Inc. (NASDAQ: AMAT)

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Applied Materials, Inc. (NASDAQ: AMAT) stock lost over 2.1% on 16th August 2019 (As of 11:32 am GMT-4; Source: Google finance). AMAT in the third quarter of FY 19 has reported the adjusted earnings per share of 74 cents but reported 14 percent decline in the adjusted revenue to $3.56 billion in the third quarter of FY 19.

On the demand side, AMAT believes the price elasticity of NAND is starting to take effect in the form of increases in the average bits per box for both smartphones and PCs. Based on the current visibility, the company remains optimistic about 2020 with an expectation that NAND investments will recover ahead of DRAM.

On a non-GAAP adjusted basis, the company reported a gross margin of 44.0 percent and operating income of $820 million.

During the quarter, the company has paid $0.21 per share in dividends, including the 5% increase the Board approved in March and the company used $528 million to repurchase over 12 million shares at an average price of around $42 per share. Over the past year, the company have repurchased 68 million shares at an average price below $39 and we have $2.4 billion remaining on our buyback authorization

The company expects fiscal fourth-quarter sales of about $3.685 billion, plus or minus $150 million. Non-GAAP EPS for the next quarter was seen between 72 cents and 80 cents. In the fourth quarter of fiscal 2019, Applied expects net sales to be approximately $3.685 billion, plus or minus $150 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $0.72 to $0.80. For Q4, AMAT expect non-GAAP earnings to be in the range of $0.72 to $0.80 per share. Within this outlook, the company expect Semiconductor Systems revenue to be approximately $2.25 billion. Services revenue should be about $955 million and Display revenue should be around $455 million, which would be up 34% sequentially. The company expect non-GAAP gross margin to be about 43.5% and non-GAAP OpEx should be about $755 million.

Meanwhile, AMAT has announced plans to acquire Kokusai Electric to expand the presence in the batch technology and accelerate innovation for the customers. This will also strengthen the services and customer support capabilities in the memory markets and throughout Asia.

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